South Korea unveiled sweeping national projects on Monday to invest approximately 800 trillion won ($518 billion) into semiconductor manufacturing and artificial intelligence capabilities.
The initiative aims to secure leadership amid global technological competition.
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It also forms part of a broader $1 trillion program to build new production hubs outside of Seoul.
Following the announcement, shares of Samsung Electronics fell 4.8% and SK Hynix declined 1.6%, as some investors expressed concern over massive tech spending.
President Lee Jae-myung announced the strategic initiative during a televised event alongside the leaders of the country's top chipmakers.
He emphasized the critical nature of the project for national growth and economic balance.
"We will rapidly expand our production capacity by drastically shortening the timeline from licensing to construction," said Jung-Kwan Kim, South Korea's minister of trade, industry and resources.
Regional Expansion and Key Players
The government confirmed that Samsung Electronics and SK Hynix will each construct two new semiconductor fabrication plants in the southwestern region of the country.
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This regional expansion is designed to rejuvenate rural areas that have faced decline due to industrial concentration in the capital.
"We must secure the core elements of AI faster than any other country," Lee said.
"Semiconductors, physical AI, and AI data centres are the triple axis for a great leap forward."
The development follows a report from the Maeil Business Newspaper on Friday, indicating that Samsung Group plans a separate 1,000 trillion won ($646 billion) investment over the next ten years.
The blueprint spans semiconductor fabs, AI data centers, advanced packaging, batteries, and displays.
Global demand for high-bandwidth memory chips continues to outpace supply as technology firms rapidly expand their infrastructure.
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SK Hynix, whose valuation topped $1 trillion in May, serves as the leading supplier of advanced HBM chips to Nvidia, while Samsung continues to invest heavily to narrow the gap with its rival.
